By following family tradition, Jim Koch created one of
America's most popular microbreweries.

Anheuser-Busch would probably be delighted if Jim Koch
(pronounced "Cook") disappeared. Koch's rapidly
growing Boston Beer Co., which he founded and runs, has put a tiny
crimp in the giant brewery's sales. Boston Beer makes Samuel
Adams beer, heralded by American beer cognoscenti as the finest
specialty, or "microbrewed" (also called
"craft-brewed"), beer on the market. The success of
Samuel Adams beer has forced Anheuser-Busch--and every other major
brewer across the country--to turn out high-quality brews that
cater to America's growing army of sophisticated beer
drinkers.

As far as 47-year-old Koch is concerned, it's manifest
destiny--or justice for the millions of discerning consumers who
have been hankering for a quality brew. Koch pulls no punches,
saying he's the man who is qualified to deliver--and he's
got the credentials to prove it.

Koch is a sixth-generation brewer, with family lines traceable
to Bavaria. His great-great-grandfather once owned a tiny brewery
in St. Louis. His father, Charles Joseph Koch, Jr., was brewmaster
at several Cincinnati breweries.

Yet, as a child, Koch remembers his father warning him against
becoming a brewer. "Fifty years ago, there were over 900
breweries in the United States," he says. "Anheuser-Busch
put about 875 of them out of business." When the market
shrunk, Koch's dad abandoned brewing and opened an
industrial-chemical distributorship.

His father's career advice fell on deaf ears. As a teenager,
Koch had no compelling career plans. But deep down he knew he'd
follow in his dad's original footsteps. "Every eldest son
in my family since the 1840s has been a brewmaster," he
boasts. "I represent the longest unbroken brewing tradition in
America."

Growing up, beer was more than just a topic of conversation in
Koch's home--it was part of the family ritual. "Ever since
I can remember, my father and I have been brewing beer in the
basement," he says. "I never liked hard liquor and I
never understood wine, but I always loved beer."

After getting his bachelor's degree in government from
Harvard in 1971, Koch put in an additional year at its business
school and another at its law school before quitting to become a
mountaineering coach at Outward Bound, a wilderness education
program. "At the time it made perfect sense," he
explains. "I was 23 years old. I realized that I wasn't
ready to make any serious career decisions. I said to myself, `Why
should I finish school until I know a little more about what I want
to do?' I realized that I would never have a chance to do this
kind of thing again. As it turned out, it was a great decision. I
had three incredible years."

Koch left Outward Bound in 1976 and returned to Harvard to get
his combined law and MBA degree. In 1978, he took a job as a
consultant with the Boston Consulting Group. By the end of 1983, he
was ready to pick up the baton and continue his family's proud
beer-making tradition. The idea was triggered by an article in a
business magazine which described how Fritz Maytag revived San
Francisco's steamed-beer tradition by opening Anchor Brewing
Co. in the 1960s. "I read that story and I started seriously
thinking about the beer business again," he says. "I
thought to myself, `People are buying a lot of imported beer and
they think they're getting good beer. Well, they're
not.' I could make much better beer than Molson, Heineken or
Beck's. I knew I could turn out really fresh beer."

When Koch confronted his father and told him he was abandoning
his $250,000-a-year job to start a small brewery, the poor man
nearly suffered a coronary. Recalls Koch, "He looked at me and
said, `Jim, that's the dumbest thing I've ever heard.
We've spent 20 years trying to get the smell of a brewery out
of our clothes.' "

Yet his father must have liked the idea, because he became the
new company's first investor. He gave his son $40,000 (in
return for stock in the company, which is worth more than $12
million today). Koch plunked down $100,000 of his own savings and
raised an additional $100,000 from a venture-capital firm.

Koch's moment of truth came in December 1984, when he
launched the Boston Beer Co. Using a recipe scribbled on a yellowed
piece of paper from his dad's attic, Koch whipped up a test
batch in his kitchen. Then he rented a pilot laboratory at the
University of California at Davis (where they have a fermentation
sciences program specializing in wine and beer) to perfect the
formula. It took six weeks to produce two cases of beer.

The reaction to his beer was unanimous. "Everyone said,
`Wow, I didn't know beer could taste this good,' " he
says, victoriously. Sometimes, obvious lessons are the most
profound. Many entrepreneurs compulsively rush ahead just to get
product out; Koch was careful from the start. "If you know
what you are doing, you will not only produce something different,
but also something better than other products on the
market."

After this test, Koch needed to find a brewery to produce the
first commercial batch of 500 barrels of beer. A small Pennsylvania
brewery fit his needs.

He soon named his beer, Samuel Adams, after the rabble-rousing
patriot who inspired the Boston Tea Party, who had later served as
the Governor of Massachusetts--and who had also operated a brewery.
Koch knew that the name would hit home with Bostonians--and with
other Americans. Amid the popularity of foreign beers, here was a
high-quality, distinctly American beer.

Koch put together a business plan that didn't require
selling a lot of beer. "I reasoned I didn't have to get
very big to break even," he says, since he was using a
commercial brewer at the time. "I had almost no fixed costs. I
didn't maintain an office until the end of 1985. Before then, I
worked out of my home, spending most of my time at the Pennsylvania
brewery, making the beer, and working the streets of Boston,
selling it."

In that critical first year, Koch worked hard at selling his
unknown beer, yet no distributor would try it. "They all said
the same thing," says Koch. "It went something like this:
`Your beer is too expensive; no one has ever heard of you; you
don't have any advertising; people don't drink American
beer, they want foreign beer.' I realized I had a battle on my
hands: Not only did I have to start a business, I had to create a
new beer category."

Koch leased a warehouse, rented a truck, and hit the road
selling his beer. Three weeks after launching his company he had 30
accounts, all of which were bars. "I couldn't afford to
produce six-packs back then," says Koch, referring to his
limited packaging capabilities. "All I had were cases, which
were ideal for bars."

Getting bar owners to sample his beers, however, proved to be a
true test of Koch's selling skills. "I knew I had a good
product," he says. "The trick was getting people to
try the beer. Bar owners, particularly, are a notoriously
tough sell. If you don't tell your story in 30 seconds, you
lose."

He soon discovered the size of his market. Six weeks after
starting up, Koch submitted his beer as an entry in the Great
American Beer Festival in Denver, which was attended by 4,000
brewers, and went from unknown brewer to budding superstar when he
won first place in the Consumer Preference category. "I knew
we had something that wasn't just good," says Koch,
"but exceptional."

For the next four years, Samuel Adams won the Consumer
Preference Award and, in 1990, captured a gold medal in the
European Pilseners category, the Great American Beer Festival's
most competitive category.

After winning his first Consumer-Preference prize, Koch amended
his business plan, setting a 20-year goal: By the year 2005, Samuel
Adams would be a bigger seller in the United States than
Heineken.

Many business analysts are convinced he can do it. He completed
1985, his first full year in business, with sales of $1.5 million.
The following year, sales leapt to $5 million. By then, Samuel
Adams was available in six-packs throughout New England.

"In our first couple of years, sales grew largely due to
word-of-mouth," Koch says. "It was real basic. People
heard about the beer and asked for it."

In 1987, sales reached $7.5 million and the Boston Beer Co. was
chalking up more than a 40 percent growth rate each year. In 1988,
he opened his own brewery in Boston, where he has since turned out
one or two new products every year.

Koch made himself Samuel Adams' official spokesperson, in
print and radio ads--not through vanity, but common sense. "I
couldn't afford to hire talent," he says.
"Professional voices are expensive. There are also rules,
royalties, and lots of paperwork. Also, nobody knows my beer better
than I do, and no one has as much passion for the
product."

Therein lies the key to Koch's success. He really loves
making beer and coming up with great products. "It's what
gets me up in the morning and fires my adrenaline all day
long," he says. "Starting your own business is probably
the best vehicle for personal growth. The continual challenge to be
better makes every day exciting."

Even though Boston Beer's sales exceeded an estimated $200
million for 1996, Koch keeps a realistic perspective. "I
can't ever let myself forget that Anheuser-Busch is the
number-one brewer in the world. They control almost half of the
U.S. beer market, and their stated objective is to reach 60
percent. That's a very formidable opponent," he says,
noting that after 12 years in business, he has gone from
"being invisible to being infinitesimal. Our mission is to be
small. I think that is a realistic goal."

Koch says he'll succeed through a clear-sighted marketing
plan that separates him from his competition. "My strategy is
not to compete with the big guys, but to do something different by
making beer that is fuller, richer and more flavorful," he
explains. "The guy who drinks Bud Light doesn't want Sam
Adams. The truth is, many people actually like light, watered-down
beer. There is nothing wrong with it, either. The big beers are
well-made beers. They're clean, consistent and, actually,
difficult to brew, because they have so little flavor to hide from.
If they make a mistake, you will taste it immediately. My goal has
always been to make something different for consumers who want more
flavorful beer than the mass-produced domestic beers."

Koch says the ultimate key to entrepreneurial success is focus.
"Focus on the two or three things that are going to make you
successful," he advises, inevitably coming back to the
obsession of his life: making great beer. "And a wonderful
obsession it is," he says, adding, "I don't know
about you, but all this talking has made me thirsty. I think
I'll pour myself a Sam Adams. Care to join me?"

New York City writer Bob Weinstein is the author of ten
books; his latest is Who Says There Are No Jobs Out There?,
from McGraw-Hill.